Professor Lorenzo Fioramonti, former Italian Minister of Education and Academic Director of NATIVA Campus, is a leading voice on sustainable governance and the wellbeing economy. Author of Wellbeing Economy and The World After GDP, and contributor to The New York Times and Harvard Business Review, Fioramonti challenges conventional economic thinking and advocates for purpose-driven leadership.

This past October, he joined Romania’s Future of Boards Awards Gala 2025, organized by Envisia, for the panel “How responsible governance can rebuild the social contract,” exploring how boards can restore trust, balance stakeholder expectations, and lead with conscience.

Read on for his insights on the future of governance and the role of boards in shaping a more responsible society.

What makes the benefit corporation model genuine, genuinely innovative compared to traditional companies that merely do CSR on the side?

Benefit corporations change how the market works. They basically say that business has a responsibility to generate profit but also to generate social and environmental value. This change is completely how we have understood the role of business in this. They become extremely innovative, they measure their social and environmental impact in the running of their business activities, and they also attract some of the best talents because nowadays the most intelligent people want to work for companies that have a purpose in this regard. I think that’d be perfect for a country like Romania, where the economy is going through a transition and in order to stay competitive and relevant, he needs to find a new purpose and needs to attract the best talent.

Corporations must publicly report their social and environmental impact. How does this obligation change the culture of corporate accountability and how it rebuilds the trust with consumers and investors?

There is a fundamental problem of trust around the world. People don’t trust institutions, they don’t trust politicians, they don’t trust the media, and they don’t trust business. We need to rebuild that trust.

Benefit corporations can help a great deal. In doing so, they change the accountability not only to the market, not only to shareholders, but to communities and stakeholders at large.

That means that a business leader and entrepreneur in a in a benefit corporation will have to respond to the needs of the community and make sure that the activities that generate the profit are not harmful.

If possible, they should actually be beneficial also to society at large in the environment.

This changes the role of business all together and business can finally become a force for good, which is what a lot of people, by the way, want.

If you think about it, trust in business these days, notwithstanding all the problems we face, is still higher than trust in any other social sector that says that business has an important role to play.

And from a legal perspective, how radical is the shift from shareholder primacy to to stakeholder responsibility?

The shift between, you know, what we used to, which is shareholder primacy, meaning that we are responsible towards our investors, those who own the shares of a company, is changing already.

If you think about what companies have done with corporate social responsibility, with corporate philanthropy and so on and so forth.
However, the problem with CSR, with corporate philanthropy, even with some of the sustainability reporting, is that companies do their business and then a couple of days before Christmas they remember that have to do charity as well.
So they try to justify why they often do not care about the social and environmental impacts in a benefit corporation.

This changes completely in the running of the company itself, not just a couple of days before Christmas.
The company has to integrate that into its own accountability mechanisms and integrated reporting.
That means basically that we finally adopt the creed that business should do business and should do so only looking at what business can do, but in doing so creates well-being directly, not indirectly every day.

If we talk about purpose and performance, the latest Italian research, the ones that you did with Nativa, show that benefit corporations outpace others in growth and productivity.
How does purpose translate into performance in measurable and economic terms?

The recent research we conducted in Italy, which is the first sovereign country that established a national legislation and benefit corporations, shows that benefit corporations are more competitive and more innovative than conventional companies.

Why is that the case?

First of all, they attract the best talent, as we have said so, and you need talent in order to be competitive.

Secondly, having a clear purpose makes everyone at a company feel that they’re part of the same journey, that they know where they’re going.

This makes them much more productive, also makes makes them much more cohesive.

Now they work within the company.

It’s a bit like creating a close knit family in which everyone knows exactly what they’re supposed to achieve.

So cohesion, the fact of having a common purpose, the fact of feeling that everyone in the companies contributing to the greater good eventually, we believe makes them much more competitive and innovative.

And given the fact that the future of growth is knowledge and innovation, that means that if you want to have economic growth, you need to have benefit corporations on trust and regulation gap.

Many purpose driven businesses worldwide operate in a legal limbo. How does the benefit corporation structure solve this trust and verification problem that slows down impact investment?

The benefit corporations make it transparent and clear what the purpose of an organisation is. That means that investors know where the money is going.

Investors also know what the long term impact and perspective will be. This makes it easier for people to invest in companies that respect their own values. Also makes it easier to understand where your money is going if you’re an investor.

And that basically creates a relationship of accountability and transparency that can resolve the limbo that we have in many national legislations in which we don’t have all the laws and the norms that are regulating the market.

In a sense, what we’re trying to achieve by creating benefit companies is to try and avoid having so many norms and regulations that have to control and steer the market.
If the market is able to generate good impact, the market doesn’t need as much regulation as it used to in the past.
Ok, the systemic question now could benefit corporation, become a bridge between private enterprise and public good, helping address issues like inequality, climate, or local development without depending solely on state investment intervention.

Let me put it this way.

Yes, the whole purpose behind having benefit corporations that we want the market to be as self reliant and self regulated as possible.

That means less state, less state interventions.

The market becomes much more balanced.

The objectives of companies become explicit by statute and constitution.

Profit becomes one of equivalent, other equivalent objectives, which means that we don’t have to rely on state intervention all the time.

We don’t have to rely on state in in, you know, like action in terms of regulations.
And also we could try and expand so many other roles that nowadays are played by the nonprofit or played by other kinds of associations and try to use market mechanisms to try and resolve those issues and those problems.
So in a sense, it’s trying to merge the conventional concept between the nonprofit and the for profit into one single entity.

What lessons could Romania learn from that transition and what cultural or policy ingredients need to be in place for it to work here?
What we see is that in 2016, when Italy introduced the first legislation on benefit corporations, it was obviously the only country to have done so.
Now we have over 15 countries around the world and counting that have developed national legislation.

What also what we’ve seen in Italy is also that at the beginning it was very gradual.
A lot of business leaders wouldn’t really know what it meant to be a benefit company, but the uptake has grown exponentially.
Now we have over 5000 companies.
The full amount of revenues, the total revenue that is generated by these companies obviously exceeds 2062 billion EUR.
So there are significant component of the country’s GDP.

So what does that mean for Romania?
It means that you can start small and grow big quite fast. And also the benefit corporation model is not just a model for rich and advanced economies, it’s a model that is actually taking root everywhere.

In South America and in Europe, it was our team that introduced these ideas and we’ve actively helped countries understand the potential of having a national legislation of benefit corporations.
Now let me put it this way, you don’t need a national legislation to become a benefit corporation, but having a national legislation can actually increase the uptake and can make it more convenient and can build strong incentives for mainstream companies to turn into benefit corporations.

So what does Romania, what is required for a country to build a national legislation and strong uptake.

First of all the attention of business.
So you need civil society actors to try and talk about this new model.
You need business schools to operate in the sense and also become loud speakers and spokespersons of this new different approach to the market economy.
And then you need some companies to take a leap of faith and say, you know what, I like this idea.
I want to try and turn my company into a purpose driven benefit corporation.
And then you will see that once a company starts, many other companies will follow suit.
This is what we’ve seen in Italy.
This is what we see happening around the world.

How could the benefit corporation status complement rather than compete with this existing legal framework, bringing ESG and transparency into the mainstream commercial space?
The social economy is a fundamental component of the market economy.

And in many ways they’re innovators and they’ve used market tools to resolve social problems.
Social enterprises are crucial. Cooperatives are crucial to have a long history and a very prestigious one.

What the benefit company does, it’s to extend the same values and the same principles to the rest of the economy. Usually social economies tend to be a minority within the larger economy.

We cannot think of fixing the market, fixing the world by having a minority.

To take lead, we need to kind of contaminate the rest of the market with the same values.

Now, you cannot turn all companies into social enterprise. You cannot turn the Amazons and so, you know, like the Microsoft’s, the Teslas of the world into social enterprises, but all of them can become benefit companies.
More recently, Open AI, the big company behind ChatGPT and artificial intelligence, has reincorporated as a public benefit corporation in the US, showing that it wants to use, let’s see whether they’re going to do this AI for the greater good.
It means that they’re going to be more accountable to stakeholders, not just that their shareholders.
It’s an example of how a large multinational with billions of dollars of capitalization can become a benefit company.
The same cannot be said about the social economy, which cannot be extended to all companies.
So what benefit companies do is to bring those values into the rest of the economy.

So looking ahead, if you were advising a Romanian business leader tomorrow, what’s the first internal step they should take to move towards becoming a benefit corporation?
I think the first step is to make the model known.
So it’d be very useful if there could be TV debates about the kind of economy Romanians want and the fact that other countries have adopted this new approach to capitalism, if you like it, or to the market that brings together all the different values we’ve seen in the social economy, nonprofit and and the for profit sectors of the economy.
This is, you know, because and we believe in the future, there’s not going to be separation.
There’s going to be one single thing we call the economy and it will be pursuing well-being as the ultimate objective.
Now what we need is this debate.
Journalists can help. Civil society can help. Business can help. Politicians must pay attention.
We cannot continue having politicians that believe that business as usual will fix us, will fix the system.
The system requires innovation in new thinking and bringing together the nonprofit and the for profit into one new type of organisation we believe is the right way forward.

And the last question, the vision one in one sentence, how would you describe the future of capitalism if the benefit corporation become the norm rather than the exception?

I’ll bet that within 10 years all companies in the world will have to be benefit companies. I don’t think we’re going to be accepting what we have accepted in the past, that is that business can generate profits for a few and generate a lot of costs for the many. This is no longer going to be acceptable.

So I bet that in 10 years, a decade only benefit companies and corporations will be allowed to operate what the world will look like, what Romania would look like, will look like a country in which the environment and so social values are upheld by everyone. In which it will be important to produce and consume responsibly, in which there is going to be more equality, in which there is going to be more competitiveness, more innovation going into everything we do.
Our cities will become more livable. Pollution will go down because our business model will take care of social, environmental and economic goals